Greaves Cotton - Research Report

Greaves Cotton Ltd. is a diversified engineering conglomerate with a brand trust of over 160 years and a market leader in fuel-agnostic powertrain solutions and manufactures cleantech powertrains for CNG, petrol and diesel segments. The Company operates in multiple segments: Automotive, Non-Automotive, Aftermarket, Retail, Electric Mobility, Technology and Finance and in the non-automotive segment, the company has a comprehensive portfolio of products including gensets, farm and application-driven industries in marine and other industrial applications. Company’s brands include Ampere, ELE and Greaves 3 Wheelers under Greaves electric mobility limited, Greaves Finance, AutoEVmart, Greaves Care and Greaves Spare under Greaves Retail, Greaves Technologies, Auto engines under Auto Application segment and Power, Agri, Industrial and Light constructions under Non-auto Applications business under its Greaves Engineering business. Company has a very strong network with presence in 25 countries backed by 20000+ Mechanic Network, 9000+ Retail Network and 7 factories located in TamilNadu, Aurangabad and Greater Noida. Its international business comprises engines, Diesel Generating (DG) sets, farm mechanization products, spare parts and construction equipment through which it operates in several industry segments like manufacturing, power, healthcare, infrastructure, agriculture, services - both IT and non-IT, mobility etc. Its revenue mix consists of 97% from domestic business and 3% from Overseas businesses. On sustainability front Greaves Cotton has delivered a real impact on the sustainability front by helping save over 35 million liters of fuel through 1.3 billion + electric kilometers driven by the company’s customers. Greaves Electric Mobility registered 11.77% contribution through its brand Ampere Vehicles in EV 2wheeler sales out of the total sales registered by the government. Company’s ambitious plans includes promoting growth of Greaves Finance and Greaves Retail with multi-brand retail stores offering 15+ EVs, 50+ models, EV service and spares, in addition to EV financing for EV adoption across India and launching futuristic vehicles in both 2-wheeler and 3-wheeler segments.

 

Fundamentals (FY22-23):

CMP	Rs. 132.5
52 - week high	Rs. 165.00
52 – week low	Rs. 118.15
Dividend % (consolidated)	0.67%
ROE	4.91%
BVPS (Rs.)	84.94
Sales (Rs.)	176206 cr.
Debt to Equity	0
P/E ratio	37.40
EPS (consolidated)	3.37
P/B ratio	1.84
Market Cap	Rs. 3,130Cr.
Face value	Rs.2

 

 

Financial Results:

Company’s Net Sales was Rs 458.58 crore in September 2023 up 22.57%, Quarterly Net Profit at Rs. 123.40 crore in September 2023 up 445.05% and EBITDA stands at Rs. 71.97 crore in September 2023 up 76.4% as compared to March 2022. Company’s EPS has increased to Rs. 5.32 in September 2023 from Rs. 0.98 in September 2022.

Key Points:

1. Greaves Electric Mobility hs partnered with Flipkart to democratize EV adoption across the country under which company will sell its EV 2Ws i.e., Ampere Magnus X branded Electric scooters in Bengaluru, Kolkata, Jaiour and Pune in its pilot phase.
2. Greaves Electric Mobility Private Limited, a subsidiary of Greaves Cotton Limited Company has allotted 68,35,450 (Sixty-Eight Lakh Thirty-Five Thousand Four Hundred and Fifty) equity shares of face value INR 10 each representing 35.80% shareholding in the Company on a fully diluted basis, to Abdul Latif Jameel, by way of preferential allotment through private placement basis for a share subscription consideration of INR 1,171 Crores (USD 150 million).
3. Company has also acquired a majority stake in Excel Controlinkage Private Ltd., a leading Indian manufacturer of mechanical and electronic motion control systems. Excel’s products are exported to over 80 countries using which Greaves Cotton will be able to strengthen their global presence.
4. In Auto Expo 2023 Greaves Cotton showcases its EV might with six new electric two and three-wheelers along with its foraying into electric powertrains with a deployment of INR 1500 crores to develop the Make in India EV ecosystem.
5. In Auto Expo 2023, the company has unveiled its Feature Rich Electric Ampere Two Wheelers - Ampere Primus, the high-speed B2C e-scooter targeted at modern millennials along with Ampere NXG and Ampere NXU, Futuristic Greaves Electric Three Wheelers - Greaves ELP, the passenger e3w; Greaves ELC, the cargo e3w, Greaves Aero Vision, a futuristic cargo concept embodying performance and efficiency.
6. The company has also collaborated with UK-based design company ETA Green Power to introduce ‘Made in India’ electric powertrain solutions supported by world-class technology.
7. On International business front it has established new ties with several European manufacturers for their requirements in Europe and CIS and it is in the advanced stage of collaboration in South Africa, which opens a whole new region for its products. It is also in the completion stage of developing a Euro-V / Euro-V + engine for a customer in Europe and has already entered contract manufacturing for engine components for US-based customers.
8. Recently the company has marked its foray into the high-speed electric two-wheeler segment with the launch of Ampere Primus at INR 1,09,900 (ex-showroom price*) which offers optimum safety with LFP battery pack, improved performance with PMS motor, belt drive, and smart connected cluster for seamless navigation.
9. Greaves Electric Mobility Private Limited (GEMPL) has achieved a remarkable milestone of over 2 lakh retail sales of its brand “Ampere” electric 2 wheelers in FY23.
10. MLR Auto Limited, a subsidiary of Greaves Electric Mobility Private Limited (GEMPL has announced its strategic partnership with Vidyuttech, a leading financing platform and lifecycle management service provider. Under the partnership, Vidyuttech will provide flexible financing for MLR's electric three-wheelers.
11. “Ampere” the electric two-wheeler brand of Greaves Electric Mobility Private Limited has entered a collaboration with ReadyAssist, a leader in the vehicle assistance industry, bringing full-stack after-sales and service support for its fleet customers. Under this agreement, ReadyAssist will cater to Ampere's fleet of vehicles to ensure smooth operations, minimal downtime, and maximum business efficiency for Ampere’s fleet customers.
12. Greaves Finance Limited, a non-banking financial company (NBFC) of Greaves Cotton Ltd, under its brand evfin has announced its partnership with Ather Energy, India's leading electric two-wheeler manufacturer to offer first-in-industry financing solutions with Buyback for Ather two-wheelers.
13. Greaves Retail has announced the launch of its complete range of e-rickshaw batteries under the brand 'Power Raja by Greaves' with a focus on the burgeoning e-rickshaw industry, Power Raja batteries are poised to reshape the landscape of small-scale last-mile transportation.
14. Enigma Automobiles Private Limited, the electric vehicle (EV) manufacturer from Central India, has announced its strategic partnership with AutoEVmart, a multi-brand EV retail store by Greaves Retail to accelerate the sales and distribution of Enigma's impressive electric two-wheeler range nationwide through AutoEVmart's retail network.
15. Bestway Agencies Private Limited (BAPL), a wholly-owned subsidiary of Greaves Electric Mobility Private Limited, has announced a strategic collaboration with Akasa Finance Limited, one of the leading e-rickshaw financers in India to embrace cleaner and more affordable transportation solutions.
16. Greaves Electric Mobility, announces the launch of electric cargo three-wheeler vehicle 'Greaves Eltra'      with an enhanced power capability of 9.5 kW at peak performance providing optimal efficiency for seamless cargo transportation.

In last 3 Years the stock gave a return of 81.30% as compared to the rise of Sensex and Nifty in the same period.

Greaves electric mobility is one of the top players in the last-mile electric mobility domain, covering 85% of the mobility segment in terms of volume with a presence in the E2W and E3W. Company’s foray into AutoEVmart business, Technologies business and NBFC business will help the company to grow with an enhanced flow of income going further. Company has turned itself completely debt free and promoters have also increased their holdings in the company in FY23. Company has a very good products and servicing portfolio filled with futuristics business such as EV2W, EV3W, Battery manufacturing, EV financing, Aftermarket, Diesel engines and Technologies with growing presence in EV space backed by growth oriented strategic acquisitions, partnerships and collabs. Considering its good financial performance, growing presence in global markets as well as in domestic markets, growth of EV industry in India as well as globally and Government’s of India’s push towards cleaner and greener mobility investors can park their funds in this company for a long-term period.

- HET ZAVERI

- info@smartinvestment.in

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